In Part One we were supportive of Catherine Rampell’s thesis that using socialism as a scare word is lazy. We need to fight socialism but we need to do it better. Catherine gives us two reasons that we need to do a better job a fighting socialism. First, folks don’t understand it:
The most common answer, volunteered by about a quarter of respondents, was that it had something to do with “equality” — “equal standing for everybody, all equal in rights, equal in distribution,” something to that effect. Smaller percentages mentioned communism, government control of utilities or even “talking to people, being social, social media, getting along with people.”
That quote is about as scary as information gets. The related second reason, is because they don’t understand it they (and especially young people) think it is OK or even a good idea:
A majority of adults under age 30 already view the term “socialism” positively; about 40 percent of those ages 30 to 49 say the same.
By now you should be really worried. We think that two of Catherine’s examples point that out. One relates to Ronald Reagan and Medicare. It ties nicely into how we work so hard at ignoring the entitlement and debt problem in the US:
Over the past 60 years — since Ronald Reagan warned that Medicare would doom the country to the s-word — the GOP has turned into the boy who cried socialism.
Socialism, as Catherine says, is about controlling the means of production. We are not sure that reasonable people can disagree that Medicare has led to government control over the means of medical production. In accounting we worry about control because we need to decide what companies should be consolidated as one unit for financial reporting purposes. The old rule for consolidation were simple so we are going to stick with them: over 50 percent must consolidate, 20 to 50 percent it depends, and under 20 percent it is unlikely. What it depends on for 20 to 50 percent is things like the next biggest stockholder. If MWG owns 49 percent and the next biggest shareholder is 1 percent then it is likely that MWG controls that entity.
Here (there is other stuff too so read on) is a discussion of how much of the national health expenditure comes from the government. Our point is that the government is such a large percentage compared to anyone and everyone else that they control medical delivery. A small example of this is that MWG has to answer the Medicare questions on every visit to the clinic.
Ronald was right. Medicare socialized medicine and now paying for Medicare is the biggest problem our republic faces. And Ronald gets part of the blame because in his remarkable presidency did many things including helping to reform Social Security (it still needs more reform but without it we would have even bigger problems) but did not reform Medicare when he clearly understood the problem.
The other problem is when Catherine says this:
The real debate Americans are having — including those on the far left trying to gain greater control of the Democratic Party — is about how regulated markets should be and how to make the rules fairer. No one in the 2020 race, not even relative outlier and self-proclaimed democratic socialist Sen. Bernie Sanders, I-Vt. [Act Naturally], is proposing that we recreate the Great Leap Forward.
We don’t know if Act Naturally is an outlier. We know that he is one of the many candidates for the Democrat nomination for president that supports the Green New Deal (GND) although most support it by voting present. We think know she knows about the NGD because she has written about it:
The resolution calls for net-zero carbon emissions by 2030 — though the International Panel on Climate Change proposes getting there by 2050, itself a herculean task. The resolution offers little guidance about how to achieve this — carbon tax? cap and trade? what of nuclear energy? — perhaps because the authors knew such choices would divide progressive constituencies.
The documents beyond the resolution answer most of her questions. Here is part of the answer:
End destructive energy extraction and associated infrastructure: fracking, tar sands, offshore drilling, oil trains, mountaintop removal, natural gas pipelines, and uranium mines. Halt any investment in fossil fuel infrastructure, including natural gas, and phase out all fossil fuel power plants. Phase out nuclear power and end nuclear subsidies. End all subsidies for fossil fuels and impose a greenhouse gas fee/tax to charge polluters for the damage they have created.” [Emphasis added]
The answer to Catherine’s query on nuclear energy seems especially clear. Let’s compare it to the Great Leap Forward:
The Great Leap Forward (Chinese: 大跃进; pinyin: Dà Yuèjìn) of the People’s Republic of China (PRC) was an economic and social campaign by the Communist Party of China (CPC) from 1958 to 1962. The campaign was led by Chairman Mao Zedong and aimed to rapidly transform the country from an agrarian economy into a socialist society through rapid industrialization and collectivization. These policies proved to lead to an exponential social and economic disaster, but these failures were hidden by widespread exaggeration and deceitful reports.
Neither idea seems like a good one but we are hard pressed to say that the Great Leap Forward is a worse idea that GND. In fact, they both look to transform an economy in a very short period of time. One required coercion. The other will require even more coercion if it comes to be. It will be interesting when the government comes to confiscate cars, trucks, power boats, power mowers, ATVs, and so on. The folks that own them also tend to own guns.
Sidebar: We brought up eminent domain in part one. We do not have the legal expertise to have much of an opinion but we wonder if the government will have to pay for all of the stuff they propose taking. We put this in a sidebar because neither outcome makes GND a good idea. It is, as they say when belittling our profession, academic. End Sidebar.
We agree with Catherine on the need to be more specific in combating socialism. We seem to disagree on need to combat it. We think we need to address the overall problems and the problems of specific proposals. It is important to label the former as socialism but not the latter.